Is VAT registration mandatory for Free Zone companies in Dubai, UAE?
The short answer is YES. In recent, DMCC, DWC Free zones advised their customers to register for VAT.
“There are strict deadlines on the requirement to register for tax, which are dependent on the size of your business. We recommend that you read the guidelines set out in the following website and register in advance to ensure you avoid incurring any fines”
Dear Valued Member,
The VAT Executive Regulations have not been released into the public domain and complete clarity on the treatment of Free Zones is still awaited.
However, based on the available information, we understand that all entities having a taxable supply exceeding AED 375,000 would be required to register for VAT and those with taxable supply between AED 187,500 and AED 375,000 may opt to register for VAT.
Further, the Ministry of Finance has issued the following deadlines for registration:
- Before 31 October 2017 – Businesses with a turnover exceeding AED 150mshould apply for registration
- Before 30 November 2017 – Businesses with a turnover exceeding AED 10mshould apply for registration
- Before04 December 2017 – All other business entities should submit their application to minimize the risk of not being registered in time for VAT go-live
We will share further information as soon as it is announced by the FTA. Nevertheless, you will need to be registered in order to claim back any VAT you pay as a business.
Our advice is to start the registration as soon as possible
Federal Tax Authority advised to do the registration for companies registered under JAFZA as well.
Other Free Zones: Its advised to register